The statute of limitations in tax law refers to the time period within which the IRS can assess additional taxes or a taxpayer can file for a refund.
IRS assessment statutes:
| Situation | Assessment SOL | |---|---| | Standard | 3 years from later of due date or actual filing date | | Substantial omission (>25% of gross income omitted) | 6 years | | Fraudulent return | Unlimited | | No return filed | Unlimited |
Taxpayer refund statutes: - Taxpayer must file a refund claim within the later of: - 3 years from the date the return was filed, OR - 2 years from the date the tax was paid.
Suspension/tolling of the SOL: - The SOL is suspended during bankruptcy proceedings. - The SOL is suspended while an Offer in Compromise is pending, plus 30 days. - Collection Due Process requests suspend the levy SOL but not necessarily the assessment SOL.
Collection statute: - The IRS generally has 10 years from the date of assessment to collect a tax liability. - This can be extended by consent (Form 900), OIC processing, installment agreements, bankruptcy, etc.
What constitutes "assessment"? The IRS records the tax liability — typically after a return is filed, an audit is completed, or a substitute return is filed.
Foreign accounts: FBAR violations have separate SOLs (6 years for civil; criminal SOLs vary).
> Exam tip: Standard assessment SOL = 3 years; 6 years for 25%+ omission; unlimited for fraud/no return filed. Collection SOL = 10 years. Refund SOL = 3 years from filing OR 2 years from payment. Critical for EA Part 2 and Part 3.